(Bloomberg) -- US consumer expectations for inflation over the medium term fell to the lowest level since at least 2013, a Federal Reserve Bank New York survey showed.
Expected inflation three years ahead dropped to 2.35% in January, the lowest on record in nearly 11 years of data, according to results of the New York Fed's monthly Survey of Consumer Expectations published Monday. Median responses for expected inflation one year ahead and five years ahead, at 3% and 2.5%, respectively, were unchanged from the month before.
The data will help reassure Fed officials who say they are seeking more confidence that inflation is set to remain near their 2% target before they begin cutting interest rates. Investors are currently betting the central bank is likely to begin easing in May.
Americans' inflation expectations for frequently-purchased goods — food and gasoline — both pulled back in the January survey. The expected price change for gasoline in the year ahead fell to 4.2% — the lowest since December 2022 — while the that for food dropped to 4.9%, the lowest since March 2020. Expectations for rent increases moderated to the lowest since late 2020.
Consumer perceptions of the labor market were mixed. Expected earnings growth rose and the perceived probability of losing one's job in the next 12 months fell, but the perceived probability of finding a job in the next three months if one's current job was lost also declined, to the lowest level since June 2021.
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